Review article
Social security system and problems of its financing
Nikola Mijatović
Abstract
The introduction of social insurance is justified by the intention to create social security for individuals in the instances of the loss of regular income (due to sickness, old age, unemployment, pregnancy and similar) which threaten their basic needs. On the basis of social security contributions during the working life of an individual, the state offers him or her a return service during the period of life when he or she partially or fully loses this income in such a way as to pay his or her public payments (social transfers). Two of the most important subsystems of social insurance are retirement pension insurance and health insurance. Retirement pension insurance covers, in principle, three main risks: old age, permanent incapacity to earn income and care for persons who remain after the death of the insured person. Health insurance, in principle, covers the risk of sickness (costs of treatment and sick pay) and a very old age (the growth of old age is accompanied with the increasing need for health services). Nowadays there is an increasing number of users and tiers of social security services, while the number of insured persons who pay contributions is decreasing (negative demographic trends). Therefore, the contemporary social security systems are in great financial difficulties, which they endeavour to overcome by partial introduction of private social insurance (in addition to the existing public social insurance) and the introduction of the system of capitalized savings (in addition to the existing system of intergenerational solidarity).
Keywords
social insurance; retirement pension insurance; health insurance; private social insurance; system of capitalized savings
Hrčak ID:
5059
URI
Publication date:
20.10.2006.
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